Task force: Affordable housing a must

Group formed to improve market in Aberdeen says influx of jobs will create greater demand

Group formed to improve market in Aberdeen says influx of jobs will create greater demand

April 03, 2007|By Jackie Burke, American News Writer

Affordable housing is necessary for further development in Aberdeen, say members of task forces formed to improve the housing markets. Jim Barringer, vice president of the development corporation, and Gail Ogdahl, president of the Aberdeen Area Chamber of Commerce, have organized two committees manned with real estate experts to evaluate and discuss some of the housing problems Aberdeen is facing. The housing task force began meeting in the fall, Ogdahl said. Since its creation, the group has split into a task force focused on single-family housing and a task force focused on rental units. Each group involves 30 to 40 people, Ogdahl said. The committees are made up of builders, city officials, county officials, bankers, real estate agents and a variety of other interested parties. The committee was formed to identify the housing problems in Aberdeen, Ogdahl said. Aberdeen has been identified as lacking "workforce" housing - houses costing $160,000 or less. According to numbers provided by Dick Grebner of Gerharter Realty, as of Wednesday, Aberdeen had 40 houses for sale below $160,000. In total, Aberdeen has 82 properties for sale with an average price of $201,182. A majority of the houses for sale for less than $160,000 are in Homes Are Possible Inc. developments, aimed at the so-called workforce housing. - ew jobs, new homes: Barringer said with the anticipated number of jobs Aberdeen will have available, the city needs affordable homes for those workers to live. Some estimate that a total of 2,000 jobs will be available in Aberdeen with up to 600 at the proposed beef processing plant south of town and the expansion of companies including Midstates Printing. One problem is the cost associated with building a lower-income house such as building permits and waterworks connections, said Jeff Mitchell of Homes Are Possible Inc. Homes Are Possible Inc. offers programs including homebuyer education, down payment and home rehabilitation assistance grants, site developments, spec homes and mutual self-help housing. One program helps low-income households build their own homes. HAPI officials have said families perform more than half of the construction labor, which lowers labor costs and allows families who would otherwise be unable to own their homes. Another program provides down-payment assistance for the people who have already qualified for the HAPI program by meeting income qualification guidelines. HAPI's sixth subdivision will consist of 28 lots, 14 of which are reserved exclusively for income-qualified households. For example, households with one to two people may not have an income exceeding $31,560, and a three- or more person household has a $36,820 maximum annual income, according to HAPI's Web site. The other 14 lots are not income-qualified, which means anyone can buy them. This creates neighborhoods of mixed incomes, according to the Web site. Mike Jung, of Jung Construction Inc. and president of the South Dakota Home Builders Association, said builders need to watch every penny when building a home. "It's riskier (for builders)," said Jody Zueger, executive director of Aberdeen Housing Authority. "Much riskier." The risk is associated with the fees required when building a new home. Jung said builders can pay about $1,200 in fees and building permits. On top of the fees, builders have to pay workers and the costs of materials. With a low-income house, builders are not guaranteed reimbursement for that money. "You have to watch every penny," Jung said. Programs that help: To help with the risk, the housing task force has designed a program delaying some fees associated with building a house. The Aberdeen City Council approved the program that was designed to encourage the construction of single-family homes by postponing (not eliminating) up to 25 fees for building permits and waterworks connection. The fees will be paid after the sale of the house. If the house does not sell within 90 days, Absolutely! Aberdeen has agreed to help builders pay the interest costs associated with those postponed fees, Mitchell said. The program has resulted in a commitment from the people at Homes are Possible Inc. and Aberdeen Builders to construct at least 25 new houses costing $160,000 or less in Aberdeen. Grebner said housing is important to the success of the city. He said people coming to town for all the available jobs are looking at the housing market and comparing it to places like Sioux Falls. "Sioux Falls has a lot more houses," he said. Jung said the push to get young Aberdonians to own their houses is because homeowners are less likely to move away than renters. "We want young people to plant their roots in Aberdeen," he said. Rentals: House sales aren't the only concern of the task forces. A separate group has been formed to focus on the rental units in town. Grebner said there are many rental units in Aberdeen and there has been a recent push for more. For example, apartment buildings were recently built on South Lawson Street and Eighth Avenue Northeast, he said. Zueger said the problem is the quality of the rental units. The majority of renters would move if nicer places were available, she said. The city is working on a program that would require landlords to be licensed and have annual inspections of their property. The project is on hold until results of a housing study are known. Study: In October, the City Council hired Community Partners Research Inc. to do a housing study to replace the last one, which was done in 1994. The firm was a co-consultant on the 1994 housing study. Zueger said the study will give the group areas to focus on and answer a lot of questions such as how many rental units Aberdeen has available. As part of enticing landlords to improve their properties, the housing task force has also started working with property owners in downtown Aberdeen to get them to refurbish their second and third floors for multi-family housing. Ogdahl said the group is looking into Main Street properties and what kinds of grants are available to property owners there. Jung said developing the second and third floors could be great for downtown and if property owners were driven, it could happen. Zueger said Aberdonians are beginning to realize housing issues are not just about housing - it's a part of developing the entire city. "It's not just for new people," she said. "It's for people that already live here." Reporter Jackie Burke; (605) 622-2303 or 1-800-925-4100 ext. 303; jburke@aberdeennews.com Xxxxxx X